Probe: State agency a slush fund

Published 10:18 pm, Thursday, February 21, 2013

HARTFORD -- State education officials used a little-known agency to dodge bidding requirements and avoid transparency in hiring consultants for about $250,000 dollars in contracts, investigators reported Thursday.

While top state school officials say they're trying to clean up their act, the investigators aren't so sure.

The State Education Resource Center (SERC) is not a nonprofit entity -- as claimed last year by state education officials -- according to a report released by the state Auditors of Public Accounts after a 10-month probe.

The agency operated in a "gray area" of state law with "unnecessary" administrative costs as part of a deal with the Rensselaer Polytechnic Institute in New York.

Swan said Thursday that the auditors' report is "alarming" and confirms his concerns of nearly a year ago.

"This shows that SERC is nothing but a slush fund for the State Education Commissioner Stefan Pryor to hire cronies to advance an agenda that is in their self-interest, but not in the best interests of Connecticut students," he said.

In their interim report, auditors said state bidding and personal-services hiring procedures were not followed in at least two instances.

At the time last spring, during fierce negotiations over Malloy's school reforms, teacher unions charged the consultants were pursuing plans to circumvent teacher contracts, particularly in charter schools in the under-achieving urban centers such as Bridgeport; and suspending bid processes on local school purchases.

"SERC represents itself as a nonprofit organization on its website," the auditors reported. "However, the statutory language indicates that SERC was created as a state entity ... SERC has not acted in a manner that is consistent with state agency requirements for transparency and accountability."

In Gov. Dannel P. Malloy's pending budget proposal, Pryor is attempting to change the makeup of SERC, making most members of a new board appointees of the governor.

In past years, state lawmakers have declined to grant SERC nonprofit status.

Kelly Donnelly, director of communications and community partnerships for the state Department of Education, said the agency wants to include SERC in reforms going forward this legislative session.

"The State Department of Education is committed to resolving issues raised about the State Education Resource Center in a manner that promotes transparency and accountability," Donnell said in a statement. "That is why, in January, the department, with the unanimous support of the State Board of Education, proposed new legislation to clarify SERC's legal status, establish a board of directors as well as new hiring and procurement procedures, and ensure transparency in its operations, among other key reforms."

"Their proposed language does not call for a not-for-profit entity and is not consistent with the provisions of quasi-public entities" under state law, the auditors said.

"We continue to be concerned about the lack of a clear legal status for SERC," the auditors said. "The absence of this structure greatly undermines the ability of SERC to be transparent and accountable to the people of Connecticut."